Correlation Between International Game and Evonik Industries
Can any of the company-specific risk be diversified away by investing in both International Game and Evonik Industries at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining International Game and Evonik Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Evonik Industries AG, you can compare the effects of market volatilities on International Game and Evonik Industries and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in International Game with a short position of Evonik Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Evonik Industries.
Diversification Opportunities for International Game and Evonik Industries
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Evonik is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Evonik Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evonik Industries and International Game is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on International Game Technology are associated (or correlated) with Evonik Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evonik Industries has no effect on the direction of International Game i.e., International Game and Evonik Industries go up and down completely randomly.
Pair Corralation between International Game and Evonik Industries
Assuming the 90 days horizon International Game Technology is expected to under-perform the Evonik Industries. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.19 times less risky than Evonik Industries. The stock trades about -0.14 of its potential returns per unit of risk. The Evonik Industries AG is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,672 in Evonik Industries AG on November 3, 2024 and sell it today you would earn a total of 142.00 from holding Evonik Industries AG or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Evonik Industries AG
Performance |
| Timeline |
| International Game |
| Evonik Industries |
International Game and Evonik Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Evonik Industries
The main advantage of trading using opposite International Game and Evonik Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Evonik Industries can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Evonik Industries will offset losses from the drop in Evonik Industries' long position.| International Game vs. Soken Chemical Engineering | International Game vs. Tokyu Construction Co | International Game vs. SEKISUI CHEMICAL | International Game vs. Australian Agricultural |
| Evonik Industries vs. Gladstone Investment | Evonik Industries vs. INTERNET INJPADR 1 | Evonik Industries vs. HEMISPHERE EGY | Evonik Industries vs. ECHO INVESTMENT ZY |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |